German chipmaker Infineon on Tuesday raised its outlook for its fiscal year through September 2011, anticipating strong growth in its automotive and industrial divisions.
Going forward, we expect to grow faster than the market and see another quarter of revenue growth with consistently high margins, Chief Executive Peter Bauer said in a statement.
The company, which makes chips for products ranging from cars to electronic passports, now expects segment result for the fiscal year, defined as operating income before write-downs and one-off items, in the high teen percentage range, when measured as a percentage of sales.
Revenue growth for the year should be in the mid-teens percentage range, it added. Analysts were expecting sales growth of 11.6 percent in fiscal 2011 and a segment result margin of 18 percent.
For the current quarter its forecast slightly higher sales than the 922 million euros ($1.27 billion) in revenue it generated in its first quarter ending December 31.
In addition, it sees a total operating result margin in the quarter ending March 31 between 18 and 20 percent.
Based in a Munich suburb, Infineon previously said it expected revenue growth of almost 10 percent and an operating margin in the mid to high teens percentage of sales.
Infineon's first-quarter sales were down 2 percent compared with the previous quarter in line with average analyst estimates of 923 million euros.
Its operating result was 177 million euros, up 4 percent sequentially, beating average analyst estimates of 165 million euros.
Operating margin in the first quarter was 19.2 percent, up from 18.2 percent in the fourth quarter, prompting a trader to call Infineon's Q1 figures spectacular, with operating margins surpassing the expected 16.6 percent figure.
European rival STMicroelectronics, last week posted quarterly earnings above expectations but said revenues would decline 7 percent to 12 percent sequentially in the first quarter of 2011.
Spun off from engineering group Siemens more than a decade ago, Infineon trades at 15.3 times forecast 12-month forward earnings compared with STMicro which trades at 11.9 times, according to Reuters StarMine.
Infineon chose to exit the mobile chip business last year by selling its wireless chip unit to Intel and now has three divisions: automotive, industrial & multimarket and chip card security.
(Reporting by Nicola Leske)